Feb 28, 2017

Wendy's To Install Self-Ordering Kiosks In Over 1,000 Stores By Year End

From making employees more efficient by providing technology that takes the thought out of orders, to reducing costs by replacing employees with technology that makes customers more efficient and takes even more thought out of orders. JL

JD Malone reports in the Columbus Dispatch:

The kiosks accomplish two purposes: They give younger customers an
ordering experience that they prefer, and they reduce labor costs. A
typical store would get three kiosks for about $15,000. The payback on those machines would be less than two years, thanks to
labor savings and increased sales. Customers still could order at the
counter.Last year, the kiosks were coming. It didn't take them long to get here.
Wendy's plans to install self-ordering kiosks in 1,000 of its stores — about 16 percent of its locations — by the end of the year.
The Dublin-based burger giant started offering kiosks last year, and demand for the technology has been high from both customers and franchise owners.
"There is a huge amount of pull from (franchisees) in order to get them," David Trimm, Wendy's chief information officer, said last week during the company's investors' day.
"With the demand we are seeing ... we can absolutely see our way to having 1,000 or more restaurants live with kiosks by the end of the year."
Trimm said the kiosks accomplish two purposes: They give younger customers an ordering experience that they prefer, and they reduce labor costs.
A typical store would get three kiosks for about $15,000. Trimm estimated the payback on those machines would be less than two years, thanks to labor savings and increased sales. Customers still could order at the counter.
Kiosks are where the industry is headed, but Wendy's is ahead of the curve, said Darren Tristano, vice president with Technomic, a food-service research and consulting firm.
"They are looking to improve their automation and their labor costs, and this is a good way to do it," he said. "They are also trying to enhance the customer experience. Younger customers prefer to use a kiosk."
Franchisees won't be required to install them.
Demand for the technology is high, and higher-volume stores will get priority, said Heidi Schauer, Wendy's spokeswoman.
Among the 1,000 kiosks will be close to 100 at company-owned stores. There already are kiosks in some central Ohio locations where Wendy's has tested the technology.
Kiosks might not immediately replace workers, but instead shift labor to other areas, Tristano said. Kiosks might also mitigate the rise of wages, something Wendy's noted as well.
"Last year was tough — 5 percent wage inflation," said Bob Wright, Wendy's chief operating officer, during his presentation to investors and analysts last week. He added that the company expects wages to rise 4 percent in 2017. "But the real question is what are we doing about it?"
Wright noted that over the past two years, Wendy's has figured out how to eliminate 31 hours of labor per week from its restaurants and is now working to use technology, such as kiosks, to increase efficiency.
Kiosks could ease lines and boost kitchen output during peak lunch and dinner times, Tristano said.
The other benefit is higher order accuracy. And as Bob Welcher, president of Restaurant Consultants Inc., said of kiosks last year: "They always are courteous. They always show up for work on time."
Kiosks are just the first step in changes that customers will see in restaurants. Trimm and Tristano said that mobile ordering and payment, via smartphones, eventually will overtake kiosks and cash registers. One reason: they provide data. Wendy's wants to know more about its customers to better tailor offers and understand trends.
But until then, kiosks are the hot thing.
"This move puts them at the forefront of the kiosk and tech movement," Tristano said.
One of the reasons Wendy's is a step ahead of most of its fast-food brethren is because the technology is being developed in-house. Its new 90 Degrees lab on North High Street in the University District is staffed with developers and other technology-focused employees. The lab sports a full mock-up of a restaurant front end where developers can test and tweak ideas on the fly.
"So we know that the things we build work," Trimm said.

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...